SPX Each-Way Lines Marked. Conservative Stance Held. Bull TnTs Wait.
Ahoy there, Trader! ⚓️
It’s Phil…
One of the many things we looked at on Monday’s group calls was the potential way price would unfold over the first few days of this week.
A 50%-60% retracement of Friday’s sell off – check – followed by a 50%-60% retracement of Monday’s rally – pending – and then, and only then, could we look for what could be the start of the recovery move. Assuming there is one and there is no follow through.
As always, the lines in the sand are drawn and the system takes care of the specifics – but it sure is nice to have an opinion unfold in real time.
SPX has the each-way lines in the sand marked off. I’m keeping my conservative stance and not jumping in too soon for the bull TnT setups. The overnight moves are not suggesting anything to give us clues just yet.
RUT is a little clearer to read – with the very well-defined consolidation I can look at the V-entry coinciding with the range low (approximately) and trade that for the bull setup, while I’m waiting to see if the bear swing target will be reached.
BTC is looking very much like it did prior to the last leg down – slow and lazy rising range, AKA a bear flag. A retest of 60K seems most likely for the moment, and then we can see if that holds or blows through to the 50K level we spoke about last week.
CL crude oil has punched through my bear trigger and now we’re simply looking for the pullback elements and selling rallies – we could well see a $25 move lower should the bear move come good.
GEX is all negative – fast popping moves like yesterday. Hopefully a little smoother than the jump-pause-jump-pause we saw.
Tuesday picks.
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Market Briefing:
Tuesday 9 June – Wall Street spent Monday deciding that Friday had been a misunderstanding. The 10% chip plunge that made it the worst day of the year was quietly reclassified as a buying opportunity. The same two names that led the crash, Marvell and Micron, led the bounce. Nobody asked what had changed.
- Monday closed: SPX 7,405.73 +0.30% / Nasdaq lifted on chip rebound / Marvell led the bounce on S&P 500 inclusion (+9%) / Flex +4% / Friday’s losers became Monday’s winners
- Brent round-tripped $4 in a single session – $98+ on weekend Iran/Israel strikes, slid to $94 on fresh truce talk / the barrel priced a war and its resolution before lunch
- BTC under $65,000, down 12% on the week / spot ETFs bled $4.33B and 59,351 coins across 13 straight sessions (record streak) / Strategy’s first BTC sale in nearly four years retired the never-sell era
- Capital fled crypto into AI stocks and IPOs – the exact trade that cratered Friday / SpaceX lists June 12 / CryptoQuant pegs BTC demand falling fastest since Terra in 2022
- Today’s catalyst: May CPI lands tomorrow near 4.2% / 30-year holds above 5% / Warsh chairs his first FOMC June 16, hired to cut, holding inflation that politely refuses
Market Snapshot
- ES: 7,434.50 / +22.25 (+0.30%) / NATHs 7,632.25 / off the Monday close but no follow-through yet
- YM: 50,870 / +45 (+0.09%) / NATHs 51,849 / Uncle Dow flatlining
- NQ: 29,602.25 / +167.00 (+0.57%) / NATHs 30,785 / Nazquack leading the small uptick
- RTY: 2,872.10 / +13.90 (+0.49%) / NATHs 2,952.00 / Uncle Russ holding its consolidation
- GC: 4,347.80 / -6.00 (-0.14%) / haven bid steady
- CL: 89.71 / -1.57 (-1.72%) / below the punched bear trigger
- VIX: 18.25 / -0.68 (-3.59%) / easing from Friday’s spike, still elevated vs the 13.38 year low
- BTC: 63,057.38 / -5.60 (-0.01%) / sub-65K, the floor that wasn’t
Tag ‘n Turn
Friday’s 50-60% retracement done. Monday’s 50-60% retracement pending. Then, and only then, can we look for the start of the recovery – assuming there is one and there’s no follow-through. SPX each-way lines marked. RUT V-entry at the range low. BTC bear flag. CL bear trigger punched.
The framework set out on Monday’s group call is playing out exactly as drawn. Step one delivered. Step two pending. The system takes care of the specifics – the only job today is to hold the conservative stance and let the lines in the sand do the work.
SPX Analysis
SPX has the each-way lines in the sand marked off. Conservative stance held – not jumping in too soon for the bull TnT setups. Overnight moves not giving clues yet. Upper line 7,466.81. Lower line 7,380. NATHs 7,620.90. Monday close 7,421.12.
SPX has the each-way lines in the sand marked off.
I’m keeping my conservative stance and not jumping in too soon for the bull TnT setups, and the overnight moves are not suggesting anything to give us clues just yet.
Lines marked. Conservative stance. No clues yet.
Gamma Exposure
GEX is all negative. Fast popping moves like yesterday – hopefully a little smoother than the jump-pause-jump-pause. Gamma flip 7,478.11. Put wall 7,400. Call wall 7,500. IV 15.50%. IV Percentile 73%.
GEX is all negative – fast popping moves like yesterday. Hopefully a little more smoother than the jump-pause-jump-pause we saw.
Cash at 7,405.73 sits below the gamma flip at 7,478.11 – the negative-gamma regime continues. Put wall and call wall now spread again at 7,400 and 7,500 respectively, framing today’s likely intraday range absent a catalyst. IV at 15.50% vs historic 12.25%. IV Rank 30.88%, IV Percentile 73%.
All negative. Fast pops. Hopefully smoother today.
RUT Analysis
RUT a little clearer to read. Very well-defined consolidation. V-entry coinciding with the range low (approximately) – trading that for the bull setup. Waiting to see if bear swing target will be reached. NATHs 2,942.41. BO Target 2,810 below.
RUT is a little clearer to read.
With the very well-defined consolidation, I can look at the V-entry coinciding with the range low (approximately) and trade that for the bull setup, while I’m waiting to see if the bear swing target will be reached.
Cleanest read. V-entry at range low. Trade it.
BTC Analysis
BTC looking very much like it did prior to the last leg down – slow and lazy rising range, AKA a bear flag. 60K retest most likely. Then 50K after that if it blows through. Current 62,906.
BTC is looking very much like it did prior to the last leg down – slow and lazy rising range, AKA a bear flag.
A retest of 60K seems most likely for the moment, and then we can see if that holds or blows through to the 50K level we spoke about last week.
The 4hr chart shows the bear flag forming through last week – the slow climb from the post-breakout lows back toward 65k without conviction in the move. Bear Entry annotation at 76,385 with Stop Loss 77,834.55 well above. Larger Range Breakout Target zone (60k) already reached on the daily; 50K is the next structural level.
Bear flag forming. 60k retest. 50k below.
CL (Oil) Analysis
Oil has punched through the bear trigger at 89.68. Looking for the pullback elements and selling rallies. Could well see a $25 move lower should the bear move come good. Daily current 89.32. Bull trigger 97.00 well above.
CL crude oil has punched through my bear trigger and now we’re simply looking for the pullback elements and selling rallies.
We could well see a $25 move lower should the bear move come good.
Bear trigger punched. Selling rallies. $25 lower possible.
Rounding Off
Everyone Bought The Version They Liked Best. Markets spent Monday deciding that Friday had been a misunderstanding. The 10% chip plunge that made it Wall Street’s worst day of the year was quietly reclassified as a buying opportunity.
The same two names that led the crash – Marvell and Micron – led the bounce. Nobody asked what had changed, because nothing had. Oil ran the identical trick at higher volume, ripping above $98 as Iran and Israel traded missiles over the weekend, then sliding to $94 the moment Trump declared a new truce close.
The barrel priced a war and its resolution inside one session, confident about both. Crypto, asked to provide shelter, declined – Bitcoin sub-$65K, down 12% on the week, with spot ETFs bleeding for 13 straight days. The money leaving crypto sprinted into AI stocks, the one trade that had just cratered.
Holding all of it up is a bond market that has stopped pretending – 30-year above 5%, May CPI tomorrow near 4.2%, Warsh chairing his first FOMC next week. The calm is rented, and the lease is short.
What’s In Front Of Me Today. Monday’s group call framework is doing the work. Friday’s 50-60% retracement – check. Monday’s 50-60% retracement – pending. Then, and only then, can we look for what could be the start of the recovery, assuming there is one and there is no follow-through.
The lines in the sand are drawn and the system takes care of the specifics. SPX each-way lines marked, conservative stance held. RUT cleanest read with the V-entry at the range low. BTC bear flag forming for the 60K retest. CL bear trigger punched, selling rallies for a $25 lower target.
CPI lands tomorrow. Everything between now and then is the system collecting on a prediction that was made out loud on Monday and is now unfolding in real time.
Expert Insights
“You don’t need to know what is going to happen next in order to make money.”
– Mark Douglas, Trading in the Zone (2000), public
Monday’s group call laid out a framework. Step one delivered on Monday’s bounce. Step two is pending today or tomorrow – the 50-60% retracement of the rally. Step three is conditional on step two and whether there’s follow-through. None of those steps require knowing what happens next. They require the lines being marked, the conservative stance being held, and the system taking care of the specifics when each level is reached.
Douglas’s Trading in the Zone spent two decades teaching exactly this: the edge is in the framework and the discipline to act when the levels arrive, not in being right about the direction. Today’s job: hold the conservative stance, wait for the SPX lines, watch the RUT V-entry, let the BTC bear flag print, sell the CL rallies. The opinion is unfolding in real time. The system is collecting.
[Source: Mark Douglas, Trading in the Zone:
Master the Market with Confidence,
Discipline, and a Winning Attitude,
Prentice Hall Press, 2000, public]
Fun Fact:
The phrase “line in the sand” I drew on this morning’s chart has a much older origin than the one most associated with it.
The popular association is with Davy Crockett at the Alamo (1836) – the romantic story that Colonel William Travis drew a line in the dirt with his sword and asked defenders to cross it if they would stay and fight. That story, while culturally enduring, has limited contemporary documentation and is widely regarded by historians as embellished.
The properly documented origin sits two thousand years earlier. In 168 BC, the Roman consul Gaius Popilius Laenas was sent to deliver an ultimatum to the Seleucid king Antiochus IV Epiphanes, who had invaded Egypt. When Antiochus tried to delay by asking for time to consult his advisors, Popilius drew a literal circle in the sand around the king with his staff and refused to let him step out of it until he had answered. Antiochus answered. Rome got its way. The diplomatic phrase entered the historical record via Livy and Polybius.
A line drawn in the sand, in other words, has been a forcing mechanism for two and a quarter millennia. The chart this morning is doing the same job – mark the level, wait for the answer, let the system pick the direction.
[Source: Livy, History of Rome, Book 45; Polybius, Histories, Book 29; both public]
Meme of the Day:
Happy trading,
Phil
Less Brain, More Gain
…and may your trades be smoother than a cashmere codpiece
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